1977 (3) TMI 40

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..... mited company, claimed development rebate of Rs. 2,63,015 for the assessment year 1967-68 on the value of newly added plant and machinery. The Income-tax Officer while assessing the assessee for the said year, noticed that the value of the machinery, namely, Rs. 13,15,074, included an amount of Rs. 48,342 being the increase in the cost of Russian machinery on account of the devaluation of Indian c .....

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..... ther to the Tribunal. Before the Tribunal it was contended that section 43A(2) had no application where the actual cost was to be determined with reference to section 43(1) of the Act. The contention of the department before the Tribunal was that when there was a specific and special provision granting depreciation consequent to changes in the rate of exchange and similarly when there existed spec .....

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..... the increased price of Rs. 48,342 payable on the imported machinery as a result of fluctuation in the exchange rate on the devaluation of Indian currency for the assessment year 1967-68 ? " For the purpose of answering this question, a reference has to be made only to four statutory provisions. It is section 33 of the Income-tax Act, 1961, which deals with the grant of development rebate. That se .....

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..... r deduction from the actual cost of the difference resulting from changes in the rate of exchange. It is not necessary to extract the sub-section in full for the simple reason that sub-section (2) of section 43A states that the provisions of sub-section (1) shall not be taken into account in computing the actual cost of an asset for the purpose of the deduction on account of development rebate und .....

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..... into the actual cost as contemplate in section 43(1). That was also the case before us. Pursuant to section 33, the assessee will be entitled to development rebate on the actual cost as defined in section 43(1) which, admittedly, included this sum of Rs. 48,342. In view of this obvious position, having regard to the express provisions contained in section 43A(2), it is rather difficult to appreci .....

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